EXHIBIT 99.1


                              SPECTRASCIENCE, INC.

EXHIBIT 99: FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT IDENTIFYING IMPORTANT FACTORS THAT COULD CAUSE THE
COMPANY'S ACTUAL RESULTS TO DIFFER FROM THOSE PROJECTED IN FORWARD-LOOKING
STATEMENTS.

         SPECTRASCIENCE, Inc. (the "Company") desires to take advantage of the
"safe harbor" provisions contained in the Private Securities Litigation Reform
Act of 1995 (the "Act"). Contained in this Form 10-KSB are statements which are
intended as "forward-looking statements" within the meaning of the Act. When
used in this Form 10-KSB, in future filings by the Company with the Securities
and Exchange Commission, in the Company's press releases and in any other
written or oral statements made by the Company, words or phrases such as "may,"
"expects," "will continue," "is anticipated," "management believes," "estimate,"
"projects," "hope" or expressions of a similar nature are intended to identify
forward-looking statements within the meaning of the Act. These statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical results or from those results presently
anticipated or projected. These risks and uncertainties include, but are not
limited to, the factors listed under the caption "Risk Factors" below. The
Company wishes to caution readers not to place undue reliance on forward-looking
statements. Readers are advised that the factors listed below may have affected
the Company's performance in the past and could affect future performance. These
factors are in addition to any other cautionary statements, written or oral,
which may be made or referred to in connection with any forward-looking
statements or contained in any subsequent filings by the Company with the
Securities and Exchange Commission. New factors may emerge from time to time,
and it is not possible for the Company to predict all of such factors, nor can
the Company assess the impact of each factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. The
forward-looking statements contained in this exhibit are made as of the date of
this Form 10-KSB, and the Company assumes no obligation to update such
forward-looking statements or to update the reasons why actual results could
differ materially from those anticipated in such forward-looking statements.

                                  RISK FACTORS

         WE HAVE INCURRED SIGNIFICANT OPERATING LOSSES EACH YEAR SINCE OUR
INCEPTION. Our net loss for the year ended December 31, 1998 was $2,414,142. The
net loss for the year ended December 31, 1999 was $2,179,833. Our accumulated
deficit at December 31, 1999 was approximately $48.7 million. Approximately
$14.1 million of the deficit has been incurred since October 1992 when our focus
changed. We expect our operating losses to continue through calendar year 2000.
We must receive regulatory approval for our Virtual Biopsy(TM) System and then
successfully commercialize it if we hope to achieve profitable operations in
2001. If we fail to obtain the necessary regulatory approvals or are not
successful in commercializing the Virtual Biopsy(TM) System, we will continue to
have operating losses until we are able to commercialize a product.

         SALES OF THE VIRTUAL BIOPSY(TM) SYSTEM WILL BE DEPENDENT ON THE
AVAILABILITY OF ADEQUATE REIMBURSEMENT FROM THIRD PARTY PAYORS. Managed care
organizations and medical facilities will seek reimbursement from various
governmental programs and private insurance carriers for charges associated with
providing Virtual Biopsy(TM) System related healthcare services. Procedures
using the Virtual Biopsy(TM) System are not, and may not ever be approved for
reimbursement by third party payors. Even if they are eligible, the level of
reimbursement may not be adequate. If we fail to obtain adequate third-party
reimbursement it will negatively affect our ability to sell the Virtual
Biopsy(TM) System and our business.


                                    Page E-1
<PAGE>


         OUR INDUSTRY IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION. The
healthcare industry in general, and the medical device sector in particular, is
heavily regulated in the areas of licensing, operations, facilities,
environmental protection, and pricing and reimbursement policies. Management
believes we are currently operating in compliance with applicable regulations.
Management also believes that the healthcare industry is constantly changing and
we will probably be required to modify our operations from time to time to stay
in compliance. We cannot predict what effect new or additional legislation or
regulation would have on us. Subsequent adoption of laws or interpretations of
existing laws could restrict or otherwise adversely affect our business.

         THE BUSINESS WE OPERATE IS SUBJECT TO EXTENSIVE FEDERAL, STATE, AND
LOCAL REGULATION. Many federal and state government agencies extensively
regulate the manufacture, packaging, labeling, advertising, promotion,
distribution and sale of our products. The broad language used in the laws that
regulate our business often makes it difficult to remain in strict compliance.
Our failure or inability to comply with applicable laws and governmental
regulations may materially and adversely affect our business.

         WE MAY NOT RECEIVE GOVERNMENTAL APPROVALS FOR OUR PROPOSED PRODUCTS ON
A TIMELY BASIS, OR AT ALL. The design, manufacture, labeling, distribution and
marketing of our products is subject to extensive government regulation in the
United States and internationally. The process of obtaining required regulatory
approvals is lengthy, expensive and uncertain.

         In the United States, medical devices are assigned to one of three
classes depending on the controls the FDA deems necessary to ensure the safety
and effectiveness of the device. The Virtual Biopsy(TM) System is a Class III
device. In addition to adhering to general controls to which all medical devices
are subject, and special controls such as performance standards, post-market
surveillance and patient registries, a Class III device must receive
pre-marketing approval to ensure its safety and effectiveness. Our pre-market
approval application for the Virtual Biopsy(TM) System received a positive FDA
Medical Device Panel Review in November 1999. In February 2000, the FDA
requested us to address queries raised by their advisory panel and the Office of
Device Evaluation's reviewing staff regarding our application. These queries are
to be addressed by re-analyzing our statistical results to ensure the Virtual
Biopsy(TM) System can be appropriately labeled. Once we have complied and
submitted a response, a final approval is still necessary before we can
commercialize the Virtual Biopsy(TM) System. We expect our application to
receive FDA approval in the first half of 2000 with a requirement by the FDA to
conduct a post-approval clinical study. It is still possible however, that the
FDA could request additional clinical data or otherwise disapprove our
application, requiring us to start over. This would delay us in commercializing
our product. The delay and additional expense would adversely affect our
business and could materially affect our financial condition.

         REGULATORY REQUIREMENTS COULD DELAY THE INTRODUCTION OF OUR PRODUCT
INTO FOREIGN MARKETS OR LIMIT OUR MARKETING SCOPE. Sales of medical devices are
subject to regulatory requirements that vary from country to country. We may not
be able to obtain necessary foreign regulatory approvals. It may also be very
costly to obtain or maintain non-U.S. regulatory approvals. Because of the
nature of our product, we must obtain ISO 9001 certification if we want to sell
products in the European Union. SPECTRASCIENCE is currently in the process of
trying to achieve ISO 9001 certification. We may not be able to achieve ISO 9001
certification on a timely basis or at all. If we do not get ISO 9001 certified
or do not obtain necessary foreign regulatory approvals it may negatively affect
our ability to market our product in foreign markets and could adversely affect
our business.


                                    Page E-2
<PAGE>


         OUR FUTURE IS HIGHLY DEPENDENT ON OUR ABILITY TO SUCCESSFULLY DEVELOP
AND COMMERCIALIZE THE VIRTUAL BIOPSY(TM) SYSTEM, OUR ONLY FULLY DEVELOPED
PRODUCT. Even though we are developing new products in addition to the Virtual
Biopsy(TM) System, it is possible our efforts may not be successful or that we
may not be able to commercialize products we succeed in developing. In order to
achieve profitable operations in 2001, we must receive final FDA clearance to
market and successfully commercialize the Virtual Biopsy(TM) System in the near
term. If we do not receive final clearance or are unable to successfully
commercialize our only fully developed product, we may not be able to raise
additional funds in the future and it may have a material adverse effect on our
financial condition and results of operations.

         THE ENDOSCOPY MARKET MAY NOT ACCEPT OUR PRODUCT. We believe that
physician acceptance of procedures performed using the Virtual Biopsy(TM) System
will be essential for it's market acceptance. There can be no assurance that
physicians, medical providers or the medical community in general will accept
and utilize our product even though it may be safe and effective. Failure of any
of our products to achieve market acceptance could have a material adverse
effect on our business and financial condition.

         WE MAY HAVE PROBLEMS MANAGING GROWTH AS WE EXPAND OUR OPERATIONS. As we
commercialize the Virtual Biopsy(TM) System and develop additional products, we
expect to expand operations in all areas. We will have to implement or improve
operational, financial and management systems, as well as expand and manage our
workforce. If we fail to manage the growth properly, our systems, personnel,
procedures or controls may not be designed, implemented or improved in a timely
and cost-effective manner. If our resources cannot support future operations,
growth may be limited and there may be a material adverse effect on our
business, financial condition and results of operations.

         OUR LIMITED SALES AND MARKETING RESOURCES COULD PREVENT US FROM
EFFECTIVELY MARKETING OUR PRODUCTS. We have very limited internal marketing and
sales resources and personnel. In order to market the Virtual Biopsy(TM) System
and any other products we may develop, we will have to develop distribution
capabilities and a marketing and sales force with technical expertise. We may
not be able to establish sales and distribution capabilities, obtain
distribution agreements on commercially reasonable terms, or gain market
acceptance for our products. We may also have difficulty in recruiting and
retaining skilled marketing and sales personnel. Our marketing and sales efforts
may not be successful. If we cannot effectively market our products it will have
a material adverse effect on our business.

         WE WILL NEED TO ENTER INTO STRATEGIC PARTNERSHIPS AND RELATIONSHIPS
WITH DISTRIBUTORS TO MARKET AND DISTRIBUTE OUR PRODUCTS. We intend to sell our
products through strategic partners and distributors. Our future success will
depend, in part, on our ability to enter into agreements that will be beneficial
to us. The prospects for relationships with strategic partners and distributors
will depend on the interest of the other party in the specific product(s)
involved. It will also depend on their ability and willingness to perform in the
role we contemplate for them. We may have limited or no control over the
resources that any particular strategic partner or distributor devotes to its
relationship with us. We may not be able to locate qualified parties that we can
enter into strategic partner or distributor relationships with. If we are not
successful in developing these types of relationships, or if the relationships
do not prove successful, our business, financial condition and results of
operations could be materially adversely affected.

         WE PURCHASE SOME RAW MATERIALS AND KEY COMPONENTS OF OUR PRODUCTS FROM
SOLE, SINGLE OR LIMITED SOURCES OF SUPPLY. For some of these components, there
are few alternative sources of supply. We may not be able to renew the existing
agreement under which we purchase our Optical Biopsy Forceps. If we need to
establish additional or replacement


                                    Page E-3
<PAGE>


suppliers for the Forceps, laser light source or spectrophotometer used in the
Virtual Biopsy(TM) System, it could be costly and time consuming. If any of our
suppliers fail to provide an adequate supply of components in a timely manner or
we cannot locate qualified alternative suppliers for materials and components at
reasonable expense, it could adversely affect our business and financial
condition. Any delays or shortages could have a material adverse effect on our
business and financial condition, especially as we scale up our manufacturing
activities in support of sales.

         WE HAVE NO EXPERIENCE IN MANUFACTURING OUR PRODUCTS IN COMMERCIAL
QUANTITIES. To be financially successful we must manufacture our product in
accordance with regulatory requirements, in commercial quantities, at
appropriate quality levels, and at acceptable costs. We may not be able to
establish or maintain reliable, high-volume manufacturing capacity at
commercially reasonable costs. If we receive FDA or foreign approval for our
products, we will need to expend significant capital resources and develop the
necessary expertise to establish large-scale manufacturing capabilities.
Manufacturers often encounter difficulties in scaling up production of new
products, including problems involving production yields, quality control,
component supply shortages, lack of qualified personnel, compliance with
applicable regulations, and the need for further regulatory approval of new
manufacturing processes. We believe our current facility is adequate to support
our commercial assembly and manufacturing activities for the next several years.
Our inability to establish and maintain large-scale manufacturing capabilities
could have a material adverse effect on our business and financial condition.

         THE MEDICAL DEVICE INDUSTRY IS HIGHLY COMPETITIVE. We are not aware of
any direct competitors using an endoscopic optical biopsy system to detect and
differentiate between healthy and pre-cancerous or cancerous tissues in the
gastrointestinal tract. However, there can be no assurance that we will be the
first to market such a system or to market such a system effectively. We believe
that our competitors are primarily development stage companies in the process of
developing spectroscopic technology for early cancer detection. However, many of
our competitors and potential competitors are larger and have greater financial,
personnel, manufacturing, distribution, marketing and other resources than we
do. Competition from these companies may materially and adversely affect our
business.

         OUR BUSINESS IS DEPENDENT UPON THE DEVELOPMENT OF NEW PRODUCTS. Rapid
innovation and technological change characterize the medical device industry.
Because of this, the life cycle of any particular product is short. Therefore,
how quickly we can develop products, gain regulatory approval and reimbursement
acceptance and supply commercial quantities of the product to the market are
important competitive factors. New discoveries and developments with respect to
the diagnostic treatment of cancer, or alternative diagnostic systems could
render our products obsolete.

         WE RELY ON PATENTS, COPYRIGHTS, TRADE SECRETS AND CONTRACTS TO PROTECT
OUR PROPRIETARY RIGHTS. Our success depends partly on our ability to maintain
patent protection for our products and processes, to preserve our trade secrets
and to operate without infringing on the proprietary rights of third parties.
The patent and trade secret positions of medical device companies often involve
complex and evolving legal and factual questions. The laws of some foreign
countries do not protect our intellectual property rights to the same extent
that the laws of the United States do. We have several allowed and pending
patents covering different aspects of the Virtual Biopsy(TM) System. We can
provide no assurances that any patent we apply for will be issued. Furthermore,
there are no assurances that any issued patents will not be challenged,
invalidated, or circumvented, or that the rights granted will provide any
competitive advantage. For the Virtual Biopsy(TM) SysteM, we currently own
exclusive rights to a total of five issued, allowed and pending U.S. patents and
applications, and two pending international patent applications. We are the
exclusive licensee of one allowed U.S. application and one other international
patent application.


                                    Page E-4
<PAGE>


         We also rely on proprietary technology that is not patented. There can
be no assurances that others will not independently develop substantially
equivalent proprietary information and techniques, or gain access to or disclose
our proprietary technology. We may not be able to protect our rights in the
unpatented proprietary technology. SPECTRASCIENCE policy requires each employee,
consultant or advisor to execute a confidentiality agreement upon the
commencement of a business relationship with us. These agreements generally
provide that all inventions conceived by the individual during the term of the
relationship are the exclusive property of SPECTRASCIENCE and shall be kept
confidential. There can be no assurance that these agreements will protect our
proprietary information in the event of unauthorized use or disclosure of such
information, or that if they do provide a meaningful level of protection, we
will have the financial resources necessary to enforce our proprietary rights.
Any loss of patent protection or know-how for our products could adversely
affect our business.

         THERE IS A HIGH RISK OF INTELLECTUAL PROPERTY LITIGATION WITHIN THE
MEDICAL DEVICE INDUSTRY. We could incur substantial expense in defending or
enforcing our intellectual property rights. In addition to being costly, the
litigation process is time consuming and would divert our limited resources.
There can be no assurances that we will have the financial or other resources
necessary to enforce our patent rights against our competitors, many of which
have substantial resources. We could also incur substantial expense in defending
ourselves against third parties with respect to patent or other intellectual
property right infringement claims. There can be no assurances that we could
successfully defend ourselves against these claims. If unsuccessful, we may have
to modify or refrain from selling our products, or enter into royalty
agreements. It is common to settle infringement claims through licensing or
similar arrangements, but the associated costs could be substantial and could
include ongoing royalties. We may not be able to obtain necessary licenses on
satisfactory terms or at all. An adverse determination in any intellectual
property litigation could have a material adverse effect on our business and
financial condition.

         WE HAVE A LICENSING AGREEMENT, WHICH IF TERMINATED WOULD ADVERSELY
AFFECT OUR BUSINESS. We currently have a licensing arrangement with The
Massachusetts General Hospital giving us an exclusive license to certain cancer
detection patents and an exclusive license to an issued patent for the Virtual
Biopsy(TM) System forceps and fiber. This license is exclusive through the life
of the licensed patents and has customary diligence requirements for
commercially reasonable best efforts to introduce products. Both of the
licensing agreements are subject to termination for failure to pay fees or other
material breach.

         We can provide no assurance that these license agreements will remain
in force or provide the proprietary rights that we require to develop and
commercialize our products. We could encounter significant delays in product
introduction if we had to design around the proprietary rights granted in these
licensing agreements, and we can provide no assurance that we would even be able
to design around them. Even if we were able to design around their proprietary
rights, our business could be adversely affected.

         OUR SUCCESS IS HIGHLY DEPENDENT ON THE RETENTION OF PRINCIPAL MEMBERS
OF OUR MANAGEMENT AND SCIENTIFIC STAFF AND THE RECRUITMENT OF ADDITIONAL
QUALIFIED PERSONNEL. We are dependent to a significant extent on the services of
our Chairman and Chief Executive Officer, Chester E. Sievert, Jr., and other key
employees. There is intense competition from other companies, research and
academic institutions and other organizations for qualified personnel with the
same skills we require. There can be no assurance that we will be successful in
hiring or retaining qualified personnel. The loss of key personnel or the
inability to hire or retain qualified personnel could have a material adverse
effect on our business and financial condition. We do not currently maintain key
man life insurance on Mr. Sievert.


                                    Page E-5
<PAGE>


         WE MAY NEED ADDITIONAL CAPITAL RESOURCES. We cannot adequately predict
the timing and amount of such capital requirements. When we may need additional
financing, and our ability to raise additional financing depends on many
factors. Some of these factors are:

         *        the progress of our research and development;
         *        the scope and results of any clinical trials;
         *        the extent to which the Virtual Biopsy(TM) System and other
                  products gain market acceptance;
         *        actions relating to regulatory and reimbursement matters;
         *        the effect of competitive products;
         *        the cost and effect of future marketing programs;
         *        the resources we devote to manufacturing and developing our
                  products; and
         *        general economic conditions and various other factors.

         We can provide no assurances that we will not require additional
funding or that if we do, it will be available on terms satisfactory to us or at
all. We may be required to seek additional funds through debt or equity
financing, arrangements with corporate partners or from other sources. We do not
have sufficient shares of common stock available in our treasury to raise
capital through the placement of common stock. Shareholder approval is required
to make additional shares of common stock available. Our shareholders may not
approve an increase in our authorized shares of common stock. Your control and
ownership could be substantially diluted if we issue additional equity
securities. We may have to cut back operations or give significant technology or
market rights to strategic partners if we cannot obtain additional financing
when needed. If we need financing and fail to obtain it on terms satisfactory to
us, it could have a material adverse effect on our business and financial
condition.

         OUR STOCK IS VOLATILE. The market price of our common stock has from
time to time experienced significant price and volume fluctuations that are
beyond our control and unrelated to our operating performance. Factors that may
have a significant adverse effect on the market price of our securities include,
but are not limited to:

         *        fluctuations in our operating results;
         *        announcements of technological innovations or new diagnostic
                  or therapeutic products by SPECTRASCIENCE or our competitors;
         *        government regulations;
         *        developments in patent or other proprietary rights;
         *        public concern as to the safety of products developed by
                  SPECTRASCIENCE or others; and
         *        general market or economic conditions.

Additionally, our common stock is thinly traded and trading in a small number of
shares of our securities, whether on the buy or sell side, may result in
significant price movements.

         OUR STOCK IS SUBJECT TO RULES THAT LIMIT YOUR ABILITY TO SELL THE
SHARES OF OUR COMMON STOCK THAT YOU OWN. Our common stock is covered by a
Commission rule that imposes additional sales practice requirements on
broker-dealers who sell these securities to persons other than established
customers and accredited investors. Accredited investors are generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 jointly with their spouse. For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the ability of broker-dealers to sell our securities or
shareholders to sell their shares in the secondary market may be adversely
affected.


                                    Page E-6
<PAGE>


         WE FACE AN INHERENT BUSINESS RISK OF EXPOSURE TO PRODUCT LIABILITY
CLAIMS, WHICH COULD MATERIALLY ADVERSELY IMPACT OUR BUSINESS. Clinical trials or
marketing of any of our products may expose us to liability claims resulting
from the use of our products. These claims might be made directly by consumers,
health care providers or by others selling the products. We currently maintain a
product liability insurance policy with an aggregate and per occurrence limit of
$2,000,000. We can provide no assurance that such limits are sufficient to
protect us in the event of litigation. Moreover, there can be no assurance that
we will be able to maintain such insurance. If we are unable to maintain
insurance under terms acceptable to us, it could prevent or inhibit the clinical
testing or commercialization of products developed by us. Even if a product
liability claim is not successful, the time and expense of defending against
such a claim may adversely affect our business and results of operations.

         ANTI-TAKEOVER PROVISIONS AVAILABLE TO US COULD DEPRIVE YOU OF AN
OPPORTUNITY TO SELL YOUR SHARES OF COMMON STOCK AT PRICES HIGHER THAN PREVAILING
MARKET PRICES. Certain provisions of Minnesota law are intended to provide
management flexibility to enhance the likelihood of continuity and stability in
the composition of our Board of Directors, in the policies formulated by the
Board, and to discourage an unsolicited takeover if the Board determines that
the takeover is not in the best interests of SPECTRASCIENCE and its
shareholders. These provisions could discourage attempts to acquire us, and not
allow you to sell your shares of common stock at prices that might be higher
than prevailing market prices.

         Our Board of Directors can issue up to 20,000,000 shares of
undesignated preferred stock and determine the price, rights, preferences and
privileges of those shares without any further vote or action by our
shareholders. The rights of holders of any preferred stock that we may issue in
the future may adversely affect your rights as a holder of common stock. At this
time we do not intend to issue any preferred stock, however, if we issued
preferred stock in connection with an acquisition or for other corporate
purposes, it could make it more difficult for a third party to acquire a
majority of our outstanding voting stock.


                                    Page E-7